SLAT

[medved]

As we get closer to the time when the US federal estate tax exemption is scheduled to be reduced, I am thinking about whether to create a SLAT (Spousal Lifetime Access Trust) as a way to lock-in the higher estate tax exemption (or at least a part of it, depending on the extent to which we fund the SLAT), without entirely ceding control -- and of course for other reasons as well; the SLAT could be disallowed if it were solely for tax purposes.

Has anyone here done this, or seriously considered it?

I asked this question once before -- some time ago -- and did not get much response. I thought I would try one more time, since we are now closer to the scheduled sunset date, so maybe those with taxable estates would now be giving more thought to this....

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[Koolau]

Well, as usual, I'm learning something new here. Never heard of this before.

So far, even with the potential changes in 2025 (2026, really) I'm still okay without a SLAT.

Could be an interesting discussion by the "rich" folks here on our Forums.

 

[luckydude]

DW and I are not considering this because we have two kids and our asset structure is complicated with lots of RE. We have some estate planning strategies in place, but they are DIY done over the years, and I think at some point in time, we can really benefit from engaging a real pro to do a comprehensive review and planning for us. We just haven't gotten around to it.

At this point, we're resigned to having to pay much higher estate tax due to the sunset of current exemption amount. We are already over the current exemption amount for a couple.

 

[MarieIG]

I have not considered a SLAT - although I have considered an irrevocable trust. The sticking point points are the lack of control, and the tax rates paid by trusts - although the latter can be mitigated.

 

[medved]

I have not considered a SLAT - although I have considered an irrevocable trust. The sticking point points are the lack of control, and ...

The idea behind the SLAT (or its cousin, the GRAT) is that you do not completely lose control. But there are limits to the amount of control that can be retained, and also risks in the event of divorce that are difficult to mitigate.

I agree with you that the loss of (full) control is a sticking point, and the main reason I have not yet done it. But paying many millions of dollars in estate tax is not all that attractive either. (On the other hand, at that time that happens, I suppose I will not care all that much.....)

 

[523HRR]

We set up a SLAT last month. Most likely will not fully use the current federal exemption, but use instead to just start getting assets (and future growth) out of our estate.

 

[OldShooter]

... Has anyone here done this, or seriously considered it? ...

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Certainly there are many available trust & estates specialist attorneys who can answer "Yes" to this question. You are dealing with a complex situation involving large amounts of money. Why would you even consider seeking anecdotes from SGOTI?

 

[medved]

Certainly there are many available trust & estates specialist attorneys who can answer "Yes" to this question. You are dealing with a complex situation involving large amounts of money. Why would you even consider seeking anecdotes from SGOTI?

The same could probably be said about half of everything that is posted on these forums -- there are people with greater expertise from whom one could seek advice.

I certainly would not rely upon anything said here. But it does sometimes give me ideas that I had not thought of before, which I can then discuss with my professional advisors.

 

[OldShooter]

... I certainly would not rely upon anything said here. But it does sometimes give me ideas that I had not thought of before, which I can then discuss with my professional advisors.

Fair enough. So many here, though, seem to think that some internet postings plus some cheap software is entirely adequate for a 7-figure estate plan. It just makes me cringe.

 

[MarieIG]

Fair enough. So many here, though, seem to think that some internet postings plus some cheap software is entirely adequate for a 7-figure estate plan. It just makes me cringe.

I do not object to the exploration of software, or articles, or templates. That said, I would not use software in lieu of a T&E attorney to draft a trust, and in a former life, I did have some exposure to trusts. The issue is - you don't know what you don't know. Hopefully, one's attorney, who specializes in the field, what would be up to date with relevant decisions and know what would survive scrutiny, and what would not. Part of the important discussion with your attorney is - this is what I want to achieve - how would you suggest this be done.